The PHP and IOP Boom: Can Momentum Last?
Summary
This is an exclusive BHB+ articleOver the last five years, intensive outpatient programs (IOPs) and partial hospitalization programs (PHPs) have proliferated nationwide to fill the gap between outpatient services and inpatient psychiatric care.Intermediate care providers have been a big hit with payers who are looking for ways to keep their members out of expensive inpatient stays. IOPs typically provide 10 to 15 hours of care per week, and PHPs offer 25 to 30 hours per week.While the services arent new, the use of virtual health and the emphasis on outpatient care have led to a rise in offerings over the past few years.IOP is a model that has existed for over 50 years before virtual forms of intensive outpatient treatment, Carter Barnhart, CEO of Charlie Health, said at INVEST. Additionally, its UHS Thousand Branches Wellness programs offer freestanding outpatient facilities, which include IOP services for teens.UHS main competitor, Acadia Healthcare (Nasdaq: ACHC), has also been eyeing future expansion in IOP and PHP.Were really excited about outpatient and partial hospitalization overall, Acadia CEO Christopher Hunter said during the Bank of America Securities Healthcare Conference in 2024. It is a small financial contributor to the business today, but I think its just one that we have significant upside over time.While IOPs and PHPs expansion offers many benefits, for the business to be sustainable going forward, providers must factor in the sectors unique challenges.One of the main pain points for intermediate care providers is ensuring patients receive the required hours to bill for those services.You are not able to build \xe0 la carte per day, Guastello said. Still, it would be unfortunate for providers and investors to see these levels of service as the next shiny object and get over their skis before fully understanding the challenges.Like all things in life, its important to proceed with caution.